Item 402 Scope & Tables Pack
Which paragraphs of Item 402 you owe, who the named executive officers are and by what arithmetic, and a Summary Compensation Table whose total is checked rather than trusted.
Enter every executive officer, not just the ones you expect to appear. The ranking is what decides, and under the scaled regime the CFO has no automatic seat.
One row per officer per fiscal year. The total is computed from columns (c) to (i); enter the total you intend to publish and it will be checked against them.
The window runs from four business days before a 10-Q, 10-K or MNPI 8-K to one business day after. An 8-K disclosing a new option grant under Item 5.02(e) is expressly excluded — do not enter one.
Informational only — not audit, attest, legal, tax, or investment advice. We are the preparer, never the filer of record. Unfolding Values is not an audit firm.
Item 402: the scope questions that have to be right before a single number is typed
Executive compensation disclosure is graded on the tables, but it fails on the questions asked before them. Which regime applies, who the named executive officers are, and which paragraphs of Item 402 the registrant actually owes are three separate determinations, and getting any of them wrong makes every table downstream wrong in a way no amount of careful arithmetic recovers.
The named executive officer determination is where small-cap proxies go astray most often, and the reason is a single missing clause. Under the full regime, Item 402(a)(3) names the principal executive officer and the principal financial officer, each regardless of compensation level, then the three most highly compensated executive officers other than those two who were serving at fiscal year end, then up to two additional individuals who would have qualified but had left. The scaled regime in Item 402(m)(2) is not the same list with smaller numbers. It gives the automatic seat to the PEO alone. A smaller reporting company’s chief financial officer is a named executive officer only if the ranking puts them there — and the ranking is on total compensation reduced by column (h), with a $100,000 floor that a figure must exceed, not merely reach.
The second trap is the scaled election itself. Item 402(l) says a qualifying registrant may provide the scaled disclosure in paragraphs (m) through (r) instead of paragraphs (a) through (k), (s), and (u). Everything outside that substitution list survives: golden parachute compensation, pay versus performance, the recovery of erroneously awarded compensation, and the policies and table on option grants made close to the release of material nonpublic information. The last two are recent enough that many small-cap proxy checklists still do not carry them, and the option-timing table is triggered by a five-business-day window that no one notices until someone counts.
This tool settles the regime, names the officers with the arithmetic shown and the losers listed alongside the winners, lays out which paragraphs are required, conditional and switched off, checks the Summary Compensation Table total against its own columns, and computes the Item 402(x) window against the filings you enter — flagging the grants close enough to a boundary that an intervening holiday would pull them in. It does not compute grant date fair value, build the pay versus performance table, or write a Compensation Discussion and Analysis, and it says so rather than producing something that looks like them.
Frequently asked questions
Is a smaller reporting company's CFO automatically a named executive officer?
No. Under the full regime, Item 402(a)(3)(i) and (ii) cover the principal executive officer and the principal financial officer, each regardless of compensation level. Under the scaled regime of Item 402(m)(2), only the PEO gets that automatic seat; the CFO appears only if they are one of the two most highly compensated executive officers other than the PEO who were serving at fiscal year end. Listing the CFO out of habit over-discloses; assuming the CFO is covered can leave a higher-paid officer out.
What does the scaled disclosure election actually switch off?
Item 402(l), quoted in full, lets a qualifying registrant provide the scaled disclosure in paragraphs (m) through (r) instead of paragraphs (a) through (k), (s), and (u). That list does not include (t) golden parachutes, (v) pay versus performance, (w) recovery of erroneously awarded compensation, or (x) option grant timing. Those still apply to a smaller reporting company.
How are the most highly compensated executive officers ranked?
Instruction 1 to Item 402(a)(3), and the identical Instruction 1 to Item 402(m)(2): by reference to total compensation for the last completed fiscal year, the column (j) figure, reduced by the amount in column (h). No disclosure is needed for an executive officer other than the automatically-covered ones whose reduced total does not exceed $100,000 — and exactly $100,000 does not exceed $100,000.
What is the Item 402(x) option-timing window?
Item 402(x)(2)(i) requires a table if, during the last completed fiscal year, the registrant awarded options to a named executive officer in the period beginning four business days before the filing of a Form 10-Q or 10-K, or the filing or furnishing of a Form 8-K disclosing material nonpublic information, and ending one business day after. An 8-K disclosing a material new option award grant under Item 5.02(e) is expressly excluded. The narrative in Item 402(x)(1) is required whether or not the table is.
How many years does the Summary Compensation Table cover?
Three completed fiscal years under Item 402(c)(1), two under Item 402(n)(1) for a scaled filer. In both regimes, Instruction 1 removes years in which the registrant was not a reporting company under section 13(a) or 15(d), unless the information previously had to be provided in response to a Commission filing requirement.
Does the total column have to equal the other columns?
Yes, and it is the only arithmetic obligation in the whole item. Item 402(c)(2)(x) and Item 402(n)(2)(x) both require column (j) to be the sum of all amounts reported in columns (c) through (i). A stated total that disagrees with its columns is a defect on the face of the table.